Can eight tons of gold save Venezuela from collapse?

Opposition legislator accuses President Nicolas Maduro of raiding precious metal from nation’s central bank

Gold bars
(Image credit: JOE KLAMAR/AFP/Getty Images)

At least eight tons of gold have reportedly been removed from the vaults of Venezuela’s central bank, as the county veers close to economic collapse.

Opposition legislator Angel Alvarado told Reuters that the gold was “removed in government vehicles between Wednesday and Friday last week”, when there were “no regular security guards present at the bank” and central bank boss Calixto Ortega was on a trip overseas. Three government sources backed up the claim.

According to Alvarado, President Nicolas Maduro plans to “sell [the gold] abroad illegally”, in a last-ditch attempt to raise hard currency amid tightening sanctions.

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Venezuela “has been caught in a downward spiral for years, with growing political discontent further fuelled by skyrocketing hyperinflation, power cuts and shortages of food and medicine”, the BBC reports. More than three million Venezuelans have left the South American country in recent years.

The ongoing political and economic crisis appeared to reach a tipping point in January, when opposition leader Juan Guaido proclaimed himself interim president, calling for Maduro’s resignation and fresh elections.

Amid the turmoil, the government is relying on gold reserves to keep the economy afloat. Bloomberg reports that Maduro “blew through more than 40% of Venezuela’s gold reserves last year” in a “desperate bid” to fund government programmes and pay millions to bondholders.

Reuters adds that Abu Dhabi investment firm Noor Capital bought three tons of gold from the Venezuelan central bank in late January, a purchase that was in accordance with “international standards and laws in place” at that time.

Meanwhile, it was reported that a request by Maduro’s officials to withdraw $1.2bn (£909m) worth of gold stored at the Bank of England had been rejected, after US Federal Reserve officials lobbied their UK counterparts to help cut off Venezuela’s government from its foreign assets.

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